PART FIVE PART FIVE LAUNCH LAUNCH McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved. Launch Launch Figure V.1 The Five Decision Sets that Lead to a The Five Decision Sets that Lead to a Marketing Plan Marketing Plan Figure V.2 Common Myths About Marketing Planning Common Myths About Marketing Planning for New Products for New Products Marketing people make the decisions that constitute a marketing plan. The technical work is complete when the new item hits the shipping dock. Marketing people take over. The marketer’s task is to persuade the end user to use the new product. The more sales potential there is in a market segment, the better that segment is as a target candidate. The pioneer wins control of a new market. As with Broadway shows, opening night is the culmination of everything we have been working for. Figure V.3 CHAPTER 16 CHAPTER 16 STRATEGIC LAUNCH PLANNING STRATEGIC LAUNCH PLANNING McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved. Strategic Givens Strategic Givens Corporate, some team decisions made earlier. Often found in the PIC Guidelines. A specified gross margin: affects funding. Speed-to-market: affects promotional outlays and schedules. Commitment to a given channel: affects distribution plan. Advertising policy: affects promotion decisions. Pricing policy: affects decision to use penetration or skimming pricing (slide down demand curve). Revision of PIC Goals Revision of PIC Goals Customer Acceptance Goals Use Satisfaction Sales Market Share Financial Performance Goals Time to break even Margins IRR, ROI Product Level Performance Goals Cost Time to Market Performance Quality Other Competitive Effect Image Change Morale Change Strategic Platform Decisions Strategic Platform Decisions Permanence Aggressiveness Type of Demand Sought Competitive Advantage Product Line Replacement Competitive Relationship Scope of Market Entry Image Permanence Permanence Permanent, stand-alone. Permanent, but as a bridge to other items e.g., platform strategy. Temporary. Given firms’ tendency to develop streams of products, more and more new products are actually only temporary. Some Other Strategic Platform Some Other Strategic Platform Decisions Decisions Aggressiveness (aggressive versus cautious attitude at entry) Type of demand sought (primary versus selective) Competitive advantage sought (differentiation, price leadership, or both) Competitive relationship (aim at a competitor, avoid a competitor) Image (create a new image, tweak an existing image, use the already-existing image) [...]... Figure 16. 1 Butt-on product replacement Low-season switch High-season switch Roll-in, roll-out Downgrading Splitting channels The existing one is simply dropped when the new one is announced Example: Ford's marketing of Mondeo and dropping of Sierra Same as butt-on, but arranging the switch at a low point between seasons Tour companies use this switch when they develop their new catalogs Same as butt-on,... market segments; BMW has the 3-, 5-, and 7-series Coca-Cola uses ads, promotions, catalogs, sponsorships, and interactive media Bic couldn’t sell perfume in lighter-shaped bottles; Gillette uses different brand names such as Oral-B for toothbrushes to avoid this problem Coors cut back promotional support in favor of Coors Light and Zima, and lost about 50% of its sales over a four-year period Disney studies... How do we best make the claim? To Whom Are We Marketing? Users vs non-users (primary vs selective demand) Target market criteria (demographic, geographic, psychographic, benefit segmentation) Everybody no narrowing down (mass customization, Post-It notes) The real issue here is commitment by all NPD participants and by management Why Should They Buy It? This too we have been testing basic... Product Positioning Options Figure 16. 2 Position to an Attribute Feature Function Benefit (direct or follow-on) Position on a Surrogate Nonpareil Parentage Manufacture Target Rank Endorsement Experience Competitor Predecessor Branding Decisions What is the brand’s role or purpose? Are you planning a line of products? Do you expect a long-term position in the market?... Selection Figure 16. 8 Question What is the brand's role or purpose? Will this product be a bridgehead to a line of products? Do you expect a long-term position in the market? Is the name irritating or insulting to any market segment? Guideline If the brand is to aid in positioning, choose a brand name with meaning (DieHard, Holiday Inn) If purely for identification, a neologism (made-up word) such as... new catalogs Same as butt-on, but arranging the new item at the top of a season Example: Polaroid used this strategy often, putting new replacement items out during the Christmas season Another version of butt-on, but arranged by a sequence of market segments Mercedes introduced its C series country by country Keeping the earlier product along side the new, but with decreased support Example: The 386... marketed it?” (product use test) Formatted in three ways: Solves major problem current products do not Better meet needs and preferences Lower price than current items How Do We Make the Claim? Product positioning statement is a strategic driver a core item not a list of advantages Some new products get one short sentence technical items more Can be stated as one or more features... Thai toilet paper Iranian laundry detergent How Brand Equity Provides Value Figure 1 6-1 0 High Brand Loyalty Reduced marketing costs Increased trade leverage High Brand Awareness High Perceived Quality Easier to make brand associations Supports quality positioning Creates positive image Patents or trademarks Supports higher-price strategy Helps customer process information Strong channel relationships... Example: The 386 chip stayed along side the 486, until the Pentium was introduced Putting the new item in a different channel or diverting the existing product into another channel Example: Old electronic products often end up in discounter channels Scope of Market Entry This is not test marketing This is launch All forces in place and working Roll out slowly checking product, trade and service... Optimum strategies: Cut costs and reduce prices Build brand equity Example: Gillette, Clorox Optimum strategies: Value-improving innovations Premium prices Source: Adapted from Vijay Vishwanath and Jonathan Mark, “Your Brand’s Best Strategy,” Harvard Business Review, May-June 1997, pp 12 3-1 29 . PART FIVE PART FIVE LAUNCH LAUNCH McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved. Launch Launch Figure V.1 The Five Decision Sets that Lead to a The Five. we have been working for. Figure V.3 CHAPTER 16 CHAPTER 16 STRATEGIC LAUNCH PLANNING STRATEGIC LAUNCH PLANNING McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved Marketing Planning for New Products for New Products Marketing people make the decisions that constitute a marketing plan. The technical work is complete when the new item hits the shipping